 | Good/Bad Credit and Discover Card? |
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Question: Good/Bad Credit and Discover Card?I work at Sam's Club and I applied for the Sam's Discover Card today. I didn't get approved, but I did get approved for the Sam's personal credit (up to 300 dollars). I'm only 20 so I don't have a lot of credit experience under my belt, but I was wondering why I got downgraded. I have bounced my debit card a couple of times, and I got a letter from the bank about it. The letter said that if I did not pay soon, they would turn it in to the credit beaureau. I paid it back so I'm assuming that they didn't have to turn it in. I have a student loan that I took out in August from the US beaureau of education for 1700 dollars. I haven't started paying it back yet, but the only credit report I am able to view online says that it is in good standing, and that I have 0 potentially bad accounts. Why did I get denied? What is it that Discover is looking for? How do I know if I have good or bad credit?
Answer: -At 20 years old you have not been in the bureaus long enough, do not have enough credit lines or established pay history's. You also may not make their minimum income.These are all things that Discover looks for when deciding weather to approve someone for one of their cards.Credit score is made up of the following;1. Payment history 35%2. Time in bureau 15%3. Types of credit 10%4. New credit 10%5. Debt to credit ratio 30%As you can see 1,2&5 are the most important as far as score is concerned. But you need much more then that. You need 3 credit card accounts (revolving) and 2 auto, boat, home, furniture or personal loan accounts (installment) all with good long pay history's and your CC balances below 30% to have not only a great score but a great credit profile as well.I look at credit all day and see young people every month who have 700 scores and can not get approved for a car loan because their score is made up of 1-credit card with a $500.00 limit paid 15-times and a couple of student loans.While this profile creates a great socre it does not show the ability or willingness to really pay anybody.Great credit takes years to establish and only a couple of months to trash. Keep working on it, you will get there. -Your main problem is you do not have a good credit score. You must build up your credit and rating before you can obtain a good or excellent credit rating. Using your debit card without having the money in the bank to cover your purchases are a big no, no. Please believe me if they wrote you it will get on your credit report. The answers to your questions are stated above but here again are your answers: #1 You are denied because you have a low credit score. #2 Discover is looking for people that will pay their debts on time. #3 You really don't have any established credit at this time so it is not good nor bad. Time will bring about the change you need one way or the other so that credit with the school that will be collected whenever you get a job and a debit card should only be used if you have money in the bank to cover it.
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